Owning our mistakes–not an earnest business blog

We all make mistakes. We try not to, but admitting to failure is a way of helping us to do better. Fortunately for most of us, the errors we make will be relatively minor in our work activities, but a big blooper can be a source of considerable worry. I remember getting something badly wrong when a junior manager back in the eighties. I was terribly upset, and it took me months to put it right, though I did without any damage in the end. It was coming up with the solution that took a lot of thinking. I learned from it, firstly to be more careful, and secondly to give myself more time with testing issues. With hindsight, I had too much work put on me because of the resignation of a colleague at the time and the long term sickness of another. There was a lesson there too in that one needs to know the pressures on staff, which my senior manager and bosses were unconcerned about. Those mitigating circumstances were not enough to let me off the hook in my view. The actual mistake was mine.

I can also think of mistakes I have made either in making career moves or not making them at one time or another. It is however no good thinking “if only I had done this” because if I had done something else at any point I would not be where I am, which is quite happy even if not a billionaire (yet). In business for myself, I have made mistakes, mainly in persisting with the wrong sort of advertising way after it should have been clear it wasn’t working.

Someone whom I knew and alas is no longer with us was a man full of bright ideas; indeed he was a very clever man. He was good at inventing new processes and was an excellent engineer. Something he was not very good at was business, exploiting his ideas or indeed being able to understand whether there was a market long term for the concepts he came up with. He would have been better working with and trusting someone who had a better business brain than he but because of his considerable ego he always knew best; he thought anyone who doubted his abilities to turn his ideas into money-makers was obviously wrong, and consequently his companies would go bust. Ultimately he was risking not only his reputation and means to carry on future projects, but also the security of his loyal family who ultimately had to pay a considerable price because he thought he was always right.

This brings me to the British Government. We have a major economic “downturn” as they call it, but it is clear that we have a serious recession perhaps even comparable with the crash of the early thirties. The Prime Minister blames events in America, and of course they have had a huge impact on all of us, and I am not going to bore you by going through that which you already know. Nevertheless, we (in UK) are much less able to ride the storm than our compatriots in other Northern European countries, largely due to the level of borrowing the Government already has, and the even higher level it is facing in an attempt to buy its way out of the slump with building projects etc. to create jobs. These splurges of our money are described as investments, but we all know that investments have to be in viable long term projects that will return a decent amount in the future. There really is no way of calming a storm once you are in it. You have to ride it out. The expenditure announced by the Government is enormous compared to the likely return even if these expensive jobs which are being purchased are viable long term. Of course the savings to income ratio in Britain is amongst the lowest in Europe, and of course not encouraged by Gordon Brown’s pensions grab, his first act when becoming Chancellor of the Exchequer in 1997. The same move also hit small income investors in British business, who were denied the privilege of reclaiming the tax credits on dividends as had the pension funds. Therefore people have not rushed out to take advantage of the ill-judged and expensive cut in VAT. Few have any cash to spare until the storm blows out.

Coupled with all these mistakes is the failure of the regulatory bodies to do their job, partly because of the splitting of responsibilities. We had the Equitable Life failure over seven years ago, which should have woken up the FSA (whose faceless members later failed to spot the dangers of the US sub-prime market and the practices of the lenders). The FSA, the Bank of England and the Treasury needed to take swift action over the Northern Rock affair which was the first serious breakage, but dithered. The “independent” Bank of England’ was obsessed with the housing market (not translated into wondering where the mortgage money was coming from) at the expense of business, and it was apparent in early to mid-2007 that interest rates were actually far too high. I discussed this with colleagues at the time and found the other day an email on the subject.

The Government is complaining that somehow it is not its fault that the economy’s wheels came off along with those of some other nations, but they did not spot the wheels were loose and tell other nations about their loose wheels. Now we have crashed and we are more badly hurt than many. The consequences for the UK and (which I will talk about soon) the knock on effects for Third World nations who depend on us to a greater or lesser degree are frightening. Somehow the Government and its ministers are not taking responsibility for their blunders, and surely they cannot do so unless they acknowledge them like the rest of us. Their egos are their weakness, but that is why they are politicians. They are no different from my engineer with the bright ideas and no inkling as to how to harness them. They may understand that they are wrong but won’t own up.

Sky News has been trailing their new programmes fronted by Jeff Randall, former BBC business Editor latterly with the Telegraph. Jeff says in the clip “If I were Prime Minister I would resign”. So would I, but that would amount to taking responsibility, wouldn’t it?